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Bank of America student loan alternatives
This student loan giant may be out of the game, but there are lots of other options.
Why doesn’t Bank of America offer student loans anymore?
Bank of America never formally announced why it shut down its private student loan program in 2008, but it came at the same time as two major changes:
- The 2008 recession. The recession led to a credit crunch, meaning that there was less money to go around for student loans and less profits to be made.
- Government-issued federal loans. Just before the recession, the government also started to move toward providing student loans itself, rather than through companies like Sallie Mae. The 2007 College Cost Reduction and Access Act cut government subsidies for private student loans, making them more expensive for banks to issue at competitive rates.
After ending its private loans program, Bank of America continued offering federal student loans until 2015. Bank of America is only one of several big banks to back out of the student lending game since 2008, along with JPMorgan Chase.
3 best Bank of America student loan alternatives
Bank of America student loans might not be an option anymore, but there are alternatives. For federal loans, you can easily apply by filling out the FAFSA.
If you already reached your federal limit, lost your eligibility or want to refinance, you might want to look into one of these three options.
CommonBond: Best for building your career
CommonBond has student loans for most common purposes: Paying for college, paying for grad school, covering an MBA or refinancing. It even offers Parent PLUS loan refinancing — either into the student’s name or for more favorable terms.
But borrowing from CommonBond doesn’t just stop there. It offers several career-building perks to its members, like connecting borrowers with potential employers and networking opportunities. If you lose your job, CommonBond can even connect you with a consulting job to tide you over while you get back on your feet.
- How much you can borrow: $5,000 to $500,000
- APR: 5.45% to 9.74%
- Fees: No fees to apply
- Loan term: 5 to 15 years
- Cosigner: Yes
LendingTree: Best for making a quick comparison
LendingTree can’t give you a student loan directly. What it can do is connect you with several different student loan providers after filling out a quick online form.
It’s a great option for students who don’t have a lot of time to individually prequalify for several different lenders — or don’t know where to start. It could also be helpful to students that need large amounts of funds, above what most private student loan providers offer.
- How much you can borrow: Varies by lender
- APR: Starting at 3%
- Fees: Varies by lender
- Loan term: Varies by lender
- Cosigner: Varies by lender
Purefy: Best for streamlined bank or credit union refinancing
Like LendingTree, Purefy isn’t a direct lender. Instead, it helps borrowers apply for student loan refinancing through one of two different lenders: Citizens Bank or PenFed Credit Union.
Many banks and credit unions don’t offer an online application process and applying can take some time. Purefy gets rid of the need for a trip — or even a phone call — by letting borrowers apply quickly online. It also offers Parent PLUS refinancing and a couple of loans that let married couples move their student debt into one loan.
- How much you can refinance: $7,500 to $300,000
- APR: 2.27% to 7.49%
- Fees: None to apply
- Loan term: 5 to 20 years
- Cosigner: Yes
Compare more student loan options
Does Bank of America offer any similar loans?
It does offer one option that your family can use to help pay for school if they own a home: a home equity line of credit (HELOC). This lets parents borrow up to the amount they own in their home. Since your home is collateral, they can often get low rates similar to what student loan providers might offer.
Come from a family that rents? You’re out of luck. Bank of America doesn’t offer any personal loans, which could have been another option. You can, however, sign up for a student credit card, which can help you build your credit history and qualify for competitive student loan refinancing rates — if you use it responsibly.
Just because Bank of America’s student loan programs are no more doesn’t mean you’re out of options. You might want to go with one of our top three picks for lenders. Or, you can stick with your favorite bank and have your family take out a HELOC to pay for school.
Before you make any decisions, you might want to check out our student loans guide. You’ll find even more lenders you might qualify for and get a breakdown of how student loans work.
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